What Small Business Insurance Policies Do You Need?

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Written By Adrian Cruce






It is definitely not enjoyable to look at insurance coverage and analyze various policies that we might need for the company that we run at the moment. However, it is something that we do need to consider since business insurance is something that is necessary.

While we do know much about the types of insurances that we need for personal reasons and we do learn a lot during our lives about how to save money on personal insurance, whenever thinking about business insurance, there is a clear lack of information available at the moment.

Risk Assessment

Most small businesses are covered by general-purpose insurance which is quite similar to the regular homeowner insurance. The problem in this case is that we only cover some property and we have just some small policies that are in effect. In most situations you will need something more but what exactly? This is where risk assessment steps in to help.

Risk assessment offers a list of different events that will create losses for your business. Such an analysis is great since it includes different factors like liability losses, automobile losses, employee injury, key person loses, business interruption losses and property losses. The insurance agent performs risk assessment for free when dealing with businesses and this can instantly highlight what extra policies you may want to get.

There are many business owners that just try to choose policies alone. You should not do this because risk assessment is usually free. You do not treat yourself at home when you need medical supervision. It is basically the same thing. The insurance agent will analyze your business operations and has the necessary experience to make proper recommendations. Based on those recommendations and the budget that you have available, you can choose what coverage to buy.

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Basic Small Business Insurance Policies To Consider

The really common ones that you may end up having to consider are:

  • General liability
  • Worker’s compensation insurance
  • Commercial liability
  • Employment practice liability
  • Equipment breakdown policies
  • Professional liability
  • Business auto insurance

What Should You Consider?

This is a really tricky question that is really hard to answer on your behalf. You need to look at your operations and try to anticipate what may happen. You are mostly interested in what could cause financial loses and what can be covered. For instance, property damage insurance covers fire damage, vandalism damage and criminal activity, among others.

We recommend that you consider liability insurance. Businesses are constantly sued in the event that property is damaged or a person is injured because of business operations. Professional insurance agents will tell you if this is something that you need and it is better to consider such an option as opposed to just reading a financial advice blog.

It is also a pretty good idea to have a list of policies that you do not necessarily need and that might be a necessity in the future. This helps you be prepared and obtain the policies that are necessary as soon as this becomes reality.